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Texas Hospitals: Budget Cuts Are Too Deep

Texas hospital officials, anticipating a House budget vote later this week, warned this morning that the current proposal could mean funding cuts of up to 37 percent for some hospitals.

Leaders from Texas Hospital Association and other hospital groups urge members of the Texas House to protect funding for loc…

Texas hospital officials, anticipating a House budget vote later this week, warned this morning that the current proposal could mean funding cuts of up to 37 percent for some hospitals.

"The proposed budget before the House cuts into the core," Dr. Dan Stultz, president and CEO of the Texas Hospital Association, said in a statement. "Hospital services — and jobs — will be lost, and not just temporarily." 

The current House budget, hospital officials argue, cuts Medicaid reimbursement rates for hospitals, nursing homes and physicians by 10 percent. It expands Medicaid managed care, which still could hinder hospitals' ability to draw down federal dollars. And it includes another $225 million in annual cost savings in the Medicaid program, many of which are directed at hospitals. Unaccounted for? The $4.3 billion in federal stimulus dollars that will dry up later this year.

Hospital officials argue these costs will simply be redirected to local officials, who will have no choice but to raise taxes, and to health insurance premiums.

“When the state fails to adequately fund health care services, the burden is shifted to local taxpayers," Stultz said, "and to private employers who provide health insurance for their employees."   

The THA is urging lawmakers to find other options, including using more of the Rainy Day Fund, finding new ways to generate revenue (i.e., taxes and fees) and modifying existing tax exemptions.   

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